Over the past few weeks I have been thinking about and researching a lot of what we who earn money online call niche markets. In plain English this means finding an area where there are ‘hungry buyers’, people who want information or a product that will solve a problem they have, and more critically, finding people who not only want a product but are willing to get their credit card out and buy it … often two completely different things.
Contrary to what a lot of you may think, although I blog pretty frequently here on PhilFAQS and several other blogs, and because I operate all my blogs in some form of profit-making mode, you might think I am making a lot of money, blogging.
This would be wrong thinking. Although some of my blogs make money, and PhilFAQS especially has really taken off this month, blogging is not at all my business focus online.
My focus is affiliate (commission) sales into ‘hungry’ niche markets. And it doesn’t matter what the claptrap you hear every night on the US news pabulum parade tells you, the notion that there is actually a world-wide global economic crisis is to a large extent, pure hokum. My online income has never been higher, and the opportunities have never been greater.
What would be a good guess why this is so? Undoubtedly, there are a lot of reasons, many are likely over my head, and few of which I am qualified to explain properly … because economic genius I ain’t.
But one that pops up continually right here on my screen in front of me, in regard to the hungry markets’ I mentioned, are something I chose to call ‘bubbles’.
Especially since I left the US nearly three years ago, many of these artificial bubbles have grown and grown until I often wonder where my fellow American’s self-reliance and common sense has fled. Is the Land of the Free and the Home of the Brave nothing more than a nation of follow the leader wimps? Are those just empty lyrics to an archaic song sung only at ball games? Let me give you just a few examples to provoke some thought/discussion:
Single Family Homes: Just recently I saw a comment from a friend also living here in the Philippines regarding comments/questions he gets frequently regarding the market value of his home here in the Philippines, mainly questions like ‘Has the bottom dropped out of the market here yet”?
His answer, and mine as well is, darned if I know. I have no idea and basically no interest. I rent the current home we live in and we are currently going to build our own home on land my wife owns in Zambales. I think the rental house I am living in now had a notional ‘market value’ of around 2 million Pesos back in 2006, and I think a notional market value for the house today is about the same. I pay less than $150 a month rent. In terms of many US houses it isn’t much. But in terms of a place to live it has every thing we could need. About 1,000 square feet, bathroom, two kitchens (clean and dirty) or (inside and outside on the screened in back patio), living/dining area, driveway that will hold two or three cars, fruit trees, fenced, gated lot, and that’s about it. The house is very solidly built with reinforced hollow block and reinforced concrete … been here more than 30 years though a hundred or so typhoons and at least one huge earthquake.
(every time I see a storm damage report from the US, I wind up wondering how long the government will accept the sub-standard construction that is the US norm … many newer houses in the US are nothing more than stapled together undersized 2 x 4s and composition (cardboard) sheathing. You could not build the average US home in most countries of the world, including the Philippines … it wouldn’t meet code.)
We have two rooms air-conditioned … master bedroom and the back bedroom I use as blog central, and I really want for absolutely nothing.
I’ll tell you what I don’t have compared to most Americans … mortgage, home owners insurance or any other single debt, whatsoever. No debt. nada. Not a thing. Would I trade this for an over-leveraged 3,000 square foot sticks and particle board ‘executive manor’ tract house in the states with a 30 year mortgage, $3,000 a tear property taxes and all the other ‘must haves’ so many Americans think they need to keep up with the Jones? “No way, Jose.” The only thing you have that I don’t is debt and obligations.
I know a lady here, living in the Philippines, who was widowed at a relatively young age. Her husband left her several small income producing properties. Over the years she has built several more and now has a small ‘empire’ of income producing properties. She paid for each properties with income from the ones before … she has no debt!
Now she, herself, lives in a quite nice 2 storey, 4 bed town home in a relatively expensive Manila suburb. She bought her nice personal residence as a gift to herself to be comfortable in her golden years … but she will be the first to advise anyone who asks to avoid going in debt for any single-family property. Buying a single-family house is not an investment, it’s incurring an obligation to sweat the rest of your life, for the benefit of other people, working at the massive air pump that keeps the ‘bubble’ inflated.
Car Insurance: This came to mind the other day when I looked at some income producing offers I was thinking of prompting on a new affiliate site. There are companies out there that will pay ridiculous amounts just to get a prospects’ zip code and pump out an insurance quote. Also payments like $70 or $100 USD just to get a sucker prospect to fill up a car insurance application.
In my high school years I worked in the auto repair industry. A huge segment of the US economy if built around a gigantic bubble of automotive protective services’. Another gigantic, over-priced, every increasing bubble.
Don’t get me wrong. I don’t advise people to go without insurance, if their car has the value to warrant it. My three year old car is long paid for so I don’t need to carry insurance, but it’s still a very good vehicle, valued by the insurance company at about PhP 700,000 … or about $14,500 USD at today’s rate. I chose to carry insurance because if the car gets stolen or totaled I have some cash to plunk down for a replacement.
What does that insurance cost me, considering the crazy driving environment here in the Philippines … and the special ‘foreigner prices’ everyone always talks about? About $225 a year .. not a month, a year. Considering, in my experienced driver point of view, the risks of loss here in the Philippines are certainly higher than in the US, why could reputable car insurance be so cheap here?
Maybe because those companies who want to pay me $70 for a single applicant aren’t Philippine companies. there is no insurance “bubble” here, no screeching ads on TV, or “Give us 15 minutes, we’ll save you 15%” come on offers. There’s just a little quiet company who writes policies for those who ask and every year mails me a renewal notice. The hyped up US insurance \industry’ (a huge campaign funding source for politicians of all ‘flavors’, needs it’s “bubble burst” in my opinion too.
OK,this is already long enough. But there are many more artificial needs and “bubbles” back there in the US I could write about. What’s you favorite molehill made into a mountain?
Popularity: 18% [?]
Philly,
On the topic of housing, it’s been mentioned before that some people have difficulty selling their houses in the Phiippines, particularly if they’ve “over capitalised”.
I was reading yesterday about an on-line auction concept which I believe could be successsful in the Philippines, not only for the people trying to sell, but also as an on-line business.
http://www.justlower.com.au/
Here’s how it works…..
An owner wants to sell their house for $500,000. The on-line auction site requires a minimum of 60,000 bids, with each bid costing $10. The lowest unique bid gets the house. So if I bid $1024.15 and it is the lowest unique bid (i.e. nobody else has bid that amount), then I get a $500,000 house for $1024.15 + $10.
The owner gets their $500,000 and (here’s the best part) the on-line business gets $100,000 for doing nothing more than hosting an efficient website.
Very interesting concept. Ib most countries this might run afoul of governemtn regulations but I don’t know why an individual property owner couldn’t do this onece and get away with it
Hi Philly and Laurence,
Similar ideas have been used in the UK to sell property.
They were classed by the authorities as illegal lotteries,one guy got 3years jail term.
regards Chas.
A man in Orlando Florida, received permission from his landlord to paint his rental Apt. At no cost to the landlord. When done the landlord said it looked very good and raised the rent. The man moved after re-painting the entire place flat black (remember he had wiitten permission). I can agree with Laurance about renting, as it fits his life style and seems good for him.
I purchased a house or condo at most duty stations I went too. HOLA/COLA and housing allowance paid each morgage. Sometime I sold quickly as I was being transfered, and sometimes I rented them out until the market allowed me to sell outright. Out of the 5 homes I never lost money and used the sale of one to pay the down on the next. Not for everybody I agree but it worked for me. So whether to buy or rent, it’s up to you!
Like the little girl with the curl … can be very, very good, or can be horrid.
Philly,
I totally agree with you when it comes to housing. I have rented in Australia for the last 20 years. I constantly get the “rent is dead money” comment from people who have obviously never sat down and done the maths on renting Vs mortgage.
My response to these people is always “and which Bank do you work for”. They look puzzled and reply “but I don’t work for a Bank.”. “Oh, yes you do. You slave away in a job you hate, forego holidays and live a stressful life all for the benefit of the Bank.”
I’ve been in Brisbane for the last year. Prior to that I was in Canberra and Melbourne. Next month I’m moving to Hobart. I live and work wherever I feel like, and thankfully I have a wonderful Filipino wife who is equally as adventurous.
Interesting indeed, Laurence. A lady I knew who was an expereinced real estate agent in Colorado was in Japan with the US Forces and used to teach a seminar and do a W&A local TV channel show on real estate investing for servicemen. A number of senior officers and other amateur ‘real estate fanatics’ tried to get her taken off the air becuase she advised AF officers, who routinely are moved every 2 to 3 years _not_ to invest in buying a home at their next temprary base. Too much risk of mo gain or even a loss in such a short time span. These guys and gals, many of them with masters degrees and other specialized education could not use their knowledge to analyze the fallacy of buying as an investment industry and morgage lender generated crapolla. Winde rhow many of those bright boys went ‘banko’ in the past two years or so, stuck with houses that they bet would rise in value but didn’t. Roulette is easy )if) you put your chips on the right number, if not, it can hurt..